OECD projects Korea's potential growth rate to hit record low in 2027

Foreign tourists walk along a street in Myeong-dong, Jung District, central Seoul, on April 28, 2025. [YONHAP]

Korea's potential growth rate is projected to fall to a record low next year, according to the Organization for Economic Cooperation and Development (OECD) on Sunday, despite robust exports fueled by a semiconductor boom.

The OECD's latest data shows the country's potential growth rate at 1.52 percent in 2027, down sharply from 1.66 percent this year. Every quarter, the country's potential growth rate is expected to decline further to 1.46 percent in the fourth quarter of next year.

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The potential growth rate refers to the potential rate of increase in the GDP, which represents the maximum level of output an economy can sustain by fully utilizing labor, capital and other resources without triggering inflation.